Remember the days when we all loved bankers? How you’d always invite a banker round for Christmas or made sure your banker always came along with you on your annual holiday to Rotterdam? Well those days are gone, sunshine. A recent study carried out at the University Of Leicester Forest East (Third Door On The Right, Just Past The Toilets) showed that 93% of all the world’s hate is directed towards bankers, with the remaining 7% being directed towards people who know a banker. How has this happened? To find out, British Foghorn spoke to the former CEO of the National Strathclyde & Kensington Bank, Sir Hubert Armstrong-Miller.
BF: Good afternoon, Sir Hubert.
HAM: Before we start I’d like to point out that my solicitor’s asked me to keep quiet about the “racehorse incident” and to make it clear that I’ve never been anywhere near Chessington World Of Adventures. Even if I had been there then there was no way I could have got the whole horse box on top of the…
BF: Sir Hubert, if I may interrupt, this is the interview to discuss your banking career.
HAM: Sorry old fruit! Bit of a diary mix up. Best ignore that last comment. Fire away!
BF: Sir Hubert, if we may begin somewhere near the beginning, what made you initially want to go into banking?
HAM: Well, I’ve always had this, what you might call, obsession with money. Even at school when my friends were interested in welding or setting up local government or whatever it is that normal five year olds like, I always loved money. But there’s something I love even more than money. Can you guess what that is?
BF: Please enlighten me.
HAM: It’s giving. I can’t think of anything better than people giving me money. Lots of it. Gives you a lovely warm feeling inside, doesn’t it? Imagine, you’re walking down the street when a decent sort comes up to you and says “Here you are Sir Hubert. Have £200. Buy yourself a nice shirt”. It really tends to put the gloss on one’s afternoon. So I fired up the old cerebellum and thought to myself “How can I get lots of people to give me money every day?” That’s when I hit upon the idea. I could open a bank. It’s terrifyingly simple, but quite brilliant. Open a bank. So that’s what I did.
BF: So you set up the National Kensington Bank which soon became the National Strathclyde & Kensington Bank after a hostile takeover of the Strathclyde Bank.
HAM: Now steady on there, old plum! “Hostile” is such an emotive word. Granted, we used some strong business techniques…
BF: There were rumours in the press that those strong business techniques involved guns.
HAM: Well, that’s a rather ugly way of phrasing it. I prefer to think of them as “automatic persuasive devices” rather than guns. A chap’s opinion can be bought rather easily when you’ve got him peering down the wrong end of a Beretta. Although that never happened, of course. As my lawyer will readily confirm.
BF: Initially, the bank saw phenomenal growth but this success was offset by some revelations about your own questionable activities.
HAM: Well, the press always made a meal of this, and having made a meal of it they were going to make sure that they ate it with a big helping of cake to follow!
BF: I’m not sure I follow….
HAM: You’re referring to this frightful mix-up with the houses I presume?
BF: Yes, that’s it. Can you explain without resorting to nonsensical food metaphors?
HAM: Well, this was always an innocent misunderstanding. The public couldn’t wait to deposit huge stacks of cash with our bank. Where I fell down was by not realising that some of them would actually want this money back and, even more incredibly, I was legally obliged to give it back. I mean, really! What’s the point of someone giving you some money if they then turn round and say, “Sorry Sir Hubert, could do with a few of the old notes to take the wife down to Ascot for the weekend, can I have my money back?” The whole thing caught me rather leg-before-wicket, I don’t mind admitting.
BF: So, prior to this, you were using the bank’s money for your own personal use?
HAM: Well, yes. All in good faith though. It allowed me to indulge in my hobby. Like many people in this proud nation of ours, I like collecting things. For some people, it’s hideous china plates with pictures of a German shepherd dog and Princess Diana on the front, for others its tax returns. Well, my hobby was collecting massive houses.
BF: An audit of your personal fortune revealed that at one time you owned 236 enormous houses around the globe, most of which you’d never visited. However, far more than the illegality of the whole thing, the public seemed more shocked by the locations of some of the houses.
HAM: What’s wrong with buying houses on the moon? Admittedly, three stately homes, a set of stables and a cathedral is probably a bit extravagant for the lunar surface, but one never knows when one’s going to find oneself unexpectedly moon-based needing somewhere to rest the cranium for the night. I mean, I once found myself in Luton with my wife’s bridge partner and no recollection of how I ended up in her bed. Ghastly business. You have to plan for these things happening.
BF: And despite using public money for your own personal spending, you escaped prison. How?
HAM: Well, there was no need to put me in prison with all the proper criminals. In a sense, what I did wasn’t actually criminal.
BF: Unfortunately, in a legal sense it is criminal.
HAM: Well, if you’re going to niggle on technicalities, you can claim anything’s criminal. I suppose with your blinkered world view you’ll be telling me that lacing a chap’s halibut with rat poison because you object to the pattern on his tie is criminal. No, no, no. Prison wouldn’t have suited me at all so I despatched a couple of crates of sherry to some of my judicial pals and everything turned out for the best.
BF: If we may move on to the recent banking crisis. How did this come about?
HAM: Well, the main problem is that us banking bods were a bit too generous a few years ago.
BF: Too generous?
HAM: Exactly. Isn’t that always the way with bankers! Anyway, we decided to be supremely magnanimous. Let’s take the case of a hypothetical person called Barry who happens to be one of those dreadful ordinary people that read The Sun and has no interest in Debrett’s. Now, a few years ago Barry would have crawled into the bank from whichever hovel he was living in and said “Can I have some money to buy a house? I’ve got a note on the back of an envelope here which says I earn £60,000 a year as a builder. Can I have a £400,000 mortgage please?” And we’d say “Yes. Of course!”
Now all this is fine and dandy when the economy’s still sailing along with the wind firmly in it’s sails. However, all it takes is for Barry’s ghastly wife to pop another horrid child out into the world, or for the price of fishfingers or lard, or whatever Barry and his family eats, to go up and suddenly he finds he can no longer afford to pay us. Knocks the stuffing out of us a bit as he defaults on his mortgage.
Now, we don’t want this bad mortgage on our books as Barry’s carelessness makes us look bad. Rather selfish of Barry you may think, but it is a cross which we in the banking industry nobly bear. What we do is package the bad mortgage at the bottom of a box, cover it up with sawdust and straw, put a pile of good mortgages on top and then sell the box to another bank.
BF: And that works?
HAM: Yes. Of course, this was such a frighteningly good wheeze that all the other banks were at it too. We all knew it went on, but so long as we all did it none of us minded. I used to do deals over a 28-course lunch with my old chum ‘Binky’ Farquhar from Farquhar, Farquhar & Pavement & Sons Bank. You’ve probably seen their adverts, you know, the ones with the dancing giraffes.
BF: Yes. ‘The bank that likes to say “Hello, scumbags!”’ I believe.
HAM: Yes, that’s the one. Anyway, Binky used to proposition me midway through the soup course. “Bit strapped for cash, old lemon” he’d say to me. “Don’t suppose you could spare us some of the readies, could you? I’ll sell you some lovely mortgages”. Then I’d say “Are they all kosher Binky?” and he’d pretend to look a bit shifty, pull one of his faces and say “I won’t say if you don’t ask Hubo!” and we’d both laugh and I’d buy them anyway. The problem was, deals like that stopped happening.
BF: Was that because of concerns over the collapse of the American sub-prime market?
HAM: No, it was more to do with the restaurant we met at getting a new chef. The lobster went right off. Of course, when deals like that stop happening, that’s it.
BF: “It”?
HAM: Yes, “it”. Money stops moving round and it’s buns in the air and scrambled eggs on the deep-pile. Still, you can’t make an omelette without breaking eggs. Actually, you can but it’s ruddy awful. I should know. Bits of shell in my teeth, couldn’t sit down for three weeks….
BF: If we may return to the point Hubert. Shortly after that your bank suffered a huge loss of public confidence and the share price plummeted. And then of course, the government had to step in to nationalise your bank.
HAM: Yes, nasty interfering sorts. Gave me a bit of a start when I saw a picture of me on the front page of the Evening Standard next to a photo of some chap with a badger’s eyebrows and a headline of ‘Darling steps in to save bank’. My initial reaction was to think “Crumbs, what’s my wife done now?” Of course the notion that my wife could step in to save the bank is ridiculous. She doesn’t know the first thing about banking.
BF: Whereas you do?
HAM: Absolutely. Not just the first thing either. I also know the second and third things about banking. Always had trouble with the fourth though. Something to do with derivatives, I think. I never really got involved, that was more one for the technical johnnies in the back room.
BF: Do you feel that the FSA provided strict enough guidelines and legislation?
HAM: FSA?
BF: Yes, do you think the rules could have been tighter?
HAM: Rules? No, no rules in banking old bean. You’re thinking of football. Although there is that one about having to have two bankers from the opposing side being between you and the goal whenever you transfer money to someone else, unless you’re not interfering with play.
BF: Isn’t that just the offside rule?
HAM: Well, perhaps. That would explain a lot. I never really understood how it was relevant.
BF: You left the bank shortly after that, with rumours circulating in the press that you’d received a £4m golden handshake. Was that true?
HAM: Not at all. It was a £4m payment into my bank account. Nothing to do with handshakes whatsoever. I certainly don’t earn millions from shaking hands. I think you’re confusing me with a minor Royal.
BF: Do you think the pay off was, in any way, offensive to people who lost lots of money when the bank hit difficulties?
HAM: Not at all. I think I’d made such a frightfully bad custard of this banking business that I needed to be paid enough to make sure I never have to go near a bank again. It’s in the public interest. And in my interest. Which at a 4% rate of return on £4m is a lot of interest!
BF: So, finally, what now for Sir Hubert?
HAM: Well, I think some cake and then a nap is in order. Got to give the cerebral motors a rest now and again!
BF: I was referring more to the next few years.
HAM: Sorry, old sausage. No, I think the next few years will see me eating quite a lot of cake and having lots of naps.
BF: Thank you Sir Hubert. It’s been a pleasure.
HAM: Has it? I thought we’d agreed you’d pay for the meal. I don’t suppose you could see your way to lending me £20 could you? Bit threadbare on the wallet side of things I’m afraid.
Sir Hubert Armstrong-Miller appears live at the MEN Arena on 13th June. Support act is Feargal Sharkey. Doors open at 7.30pm.
BF: Good afternoon, Sir Hubert.
HAM: Before we start I’d like to point out that my solicitor’s asked me to keep quiet about the “racehorse incident” and to make it clear that I’ve never been anywhere near Chessington World Of Adventures. Even if I had been there then there was no way I could have got the whole horse box on top of the…
BF: Sir Hubert, if I may interrupt, this is the interview to discuss your banking career.
HAM: Sorry old fruit! Bit of a diary mix up. Best ignore that last comment. Fire away!
BF: Sir Hubert, if we may begin somewhere near the beginning, what made you initially want to go into banking?
HAM: Well, I’ve always had this, what you might call, obsession with money. Even at school when my friends were interested in welding or setting up local government or whatever it is that normal five year olds like, I always loved money. But there’s something I love even more than money. Can you guess what that is?
BF: Please enlighten me.
HAM: It’s giving. I can’t think of anything better than people giving me money. Lots of it. Gives you a lovely warm feeling inside, doesn’t it? Imagine, you’re walking down the street when a decent sort comes up to you and says “Here you are Sir Hubert. Have £200. Buy yourself a nice shirt”. It really tends to put the gloss on one’s afternoon. So I fired up the old cerebellum and thought to myself “How can I get lots of people to give me money every day?” That’s when I hit upon the idea. I could open a bank. It’s terrifyingly simple, but quite brilliant. Open a bank. So that’s what I did.
BF: So you set up the National Kensington Bank which soon became the National Strathclyde & Kensington Bank after a hostile takeover of the Strathclyde Bank.
HAM: Now steady on there, old plum! “Hostile” is such an emotive word. Granted, we used some strong business techniques…
BF: There were rumours in the press that those strong business techniques involved guns.
HAM: Well, that’s a rather ugly way of phrasing it. I prefer to think of them as “automatic persuasive devices” rather than guns. A chap’s opinion can be bought rather easily when you’ve got him peering down the wrong end of a Beretta. Although that never happened, of course. As my lawyer will readily confirm.
BF: Initially, the bank saw phenomenal growth but this success was offset by some revelations about your own questionable activities.
HAM: Well, the press always made a meal of this, and having made a meal of it they were going to make sure that they ate it with a big helping of cake to follow!
BF: I’m not sure I follow….
HAM: You’re referring to this frightful mix-up with the houses I presume?
BF: Yes, that’s it. Can you explain without resorting to nonsensical food metaphors?
HAM: Well, this was always an innocent misunderstanding. The public couldn’t wait to deposit huge stacks of cash with our bank. Where I fell down was by not realising that some of them would actually want this money back and, even more incredibly, I was legally obliged to give it back. I mean, really! What’s the point of someone giving you some money if they then turn round and say, “Sorry Sir Hubert, could do with a few of the old notes to take the wife down to Ascot for the weekend, can I have my money back?” The whole thing caught me rather leg-before-wicket, I don’t mind admitting.
BF: So, prior to this, you were using the bank’s money for your own personal use?
HAM: Well, yes. All in good faith though. It allowed me to indulge in my hobby. Like many people in this proud nation of ours, I like collecting things. For some people, it’s hideous china plates with pictures of a German shepherd dog and Princess Diana on the front, for others its tax returns. Well, my hobby was collecting massive houses.
BF: An audit of your personal fortune revealed that at one time you owned 236 enormous houses around the globe, most of which you’d never visited. However, far more than the illegality of the whole thing, the public seemed more shocked by the locations of some of the houses.
HAM: What’s wrong with buying houses on the moon? Admittedly, three stately homes, a set of stables and a cathedral is probably a bit extravagant for the lunar surface, but one never knows when one’s going to find oneself unexpectedly moon-based needing somewhere to rest the cranium for the night. I mean, I once found myself in Luton with my wife’s bridge partner and no recollection of how I ended up in her bed. Ghastly business. You have to plan for these things happening.
BF: And despite using public money for your own personal spending, you escaped prison. How?
HAM: Well, there was no need to put me in prison with all the proper criminals. In a sense, what I did wasn’t actually criminal.
BF: Unfortunately, in a legal sense it is criminal.
HAM: Well, if you’re going to niggle on technicalities, you can claim anything’s criminal. I suppose with your blinkered world view you’ll be telling me that lacing a chap’s halibut with rat poison because you object to the pattern on his tie is criminal. No, no, no. Prison wouldn’t have suited me at all so I despatched a couple of crates of sherry to some of my judicial pals and everything turned out for the best.
BF: If we may move on to the recent banking crisis. How did this come about?
HAM: Well, the main problem is that us banking bods were a bit too generous a few years ago.
BF: Too generous?
HAM: Exactly. Isn’t that always the way with bankers! Anyway, we decided to be supremely magnanimous. Let’s take the case of a hypothetical person called Barry who happens to be one of those dreadful ordinary people that read The Sun and has no interest in Debrett’s. Now, a few years ago Barry would have crawled into the bank from whichever hovel he was living in and said “Can I have some money to buy a house? I’ve got a note on the back of an envelope here which says I earn £60,000 a year as a builder. Can I have a £400,000 mortgage please?” And we’d say “Yes. Of course!”
Now all this is fine and dandy when the economy’s still sailing along with the wind firmly in it’s sails. However, all it takes is for Barry’s ghastly wife to pop another horrid child out into the world, or for the price of fishfingers or lard, or whatever Barry and his family eats, to go up and suddenly he finds he can no longer afford to pay us. Knocks the stuffing out of us a bit as he defaults on his mortgage.
Now, we don’t want this bad mortgage on our books as Barry’s carelessness makes us look bad. Rather selfish of Barry you may think, but it is a cross which we in the banking industry nobly bear. What we do is package the bad mortgage at the bottom of a box, cover it up with sawdust and straw, put a pile of good mortgages on top and then sell the box to another bank.
BF: And that works?
HAM: Yes. Of course, this was such a frighteningly good wheeze that all the other banks were at it too. We all knew it went on, but so long as we all did it none of us minded. I used to do deals over a 28-course lunch with my old chum ‘Binky’ Farquhar from Farquhar, Farquhar & Pavement & Sons Bank. You’ve probably seen their adverts, you know, the ones with the dancing giraffes.
BF: Yes. ‘The bank that likes to say “Hello, scumbags!”’ I believe.
HAM: Yes, that’s the one. Anyway, Binky used to proposition me midway through the soup course. “Bit strapped for cash, old lemon” he’d say to me. “Don’t suppose you could spare us some of the readies, could you? I’ll sell you some lovely mortgages”. Then I’d say “Are they all kosher Binky?” and he’d pretend to look a bit shifty, pull one of his faces and say “I won’t say if you don’t ask Hubo!” and we’d both laugh and I’d buy them anyway. The problem was, deals like that stopped happening.
BF: Was that because of concerns over the collapse of the American sub-prime market?
HAM: No, it was more to do with the restaurant we met at getting a new chef. The lobster went right off. Of course, when deals like that stop happening, that’s it.
BF: “It”?
HAM: Yes, “it”. Money stops moving round and it’s buns in the air and scrambled eggs on the deep-pile. Still, you can’t make an omelette without breaking eggs. Actually, you can but it’s ruddy awful. I should know. Bits of shell in my teeth, couldn’t sit down for three weeks….
BF: If we may return to the point Hubert. Shortly after that your bank suffered a huge loss of public confidence and the share price plummeted. And then of course, the government had to step in to nationalise your bank.
HAM: Yes, nasty interfering sorts. Gave me a bit of a start when I saw a picture of me on the front page of the Evening Standard next to a photo of some chap with a badger’s eyebrows and a headline of ‘Darling steps in to save bank’. My initial reaction was to think “Crumbs, what’s my wife done now?” Of course the notion that my wife could step in to save the bank is ridiculous. She doesn’t know the first thing about banking.
BF: Whereas you do?
HAM: Absolutely. Not just the first thing either. I also know the second and third things about banking. Always had trouble with the fourth though. Something to do with derivatives, I think. I never really got involved, that was more one for the technical johnnies in the back room.
BF: Do you feel that the FSA provided strict enough guidelines and legislation?
HAM: FSA?
BF: Yes, do you think the rules could have been tighter?
HAM: Rules? No, no rules in banking old bean. You’re thinking of football. Although there is that one about having to have two bankers from the opposing side being between you and the goal whenever you transfer money to someone else, unless you’re not interfering with play.
BF: Isn’t that just the offside rule?
HAM: Well, perhaps. That would explain a lot. I never really understood how it was relevant.
BF: You left the bank shortly after that, with rumours circulating in the press that you’d received a £4m golden handshake. Was that true?
HAM: Not at all. It was a £4m payment into my bank account. Nothing to do with handshakes whatsoever. I certainly don’t earn millions from shaking hands. I think you’re confusing me with a minor Royal.
BF: Do you think the pay off was, in any way, offensive to people who lost lots of money when the bank hit difficulties?
HAM: Not at all. I think I’d made such a frightfully bad custard of this banking business that I needed to be paid enough to make sure I never have to go near a bank again. It’s in the public interest. And in my interest. Which at a 4% rate of return on £4m is a lot of interest!
BF: So, finally, what now for Sir Hubert?
HAM: Well, I think some cake and then a nap is in order. Got to give the cerebral motors a rest now and again!
BF: I was referring more to the next few years.
HAM: Sorry, old sausage. No, I think the next few years will see me eating quite a lot of cake and having lots of naps.
BF: Thank you Sir Hubert. It’s been a pleasure.
HAM: Has it? I thought we’d agreed you’d pay for the meal. I don’t suppose you could see your way to lending me £20 could you? Bit threadbare on the wallet side of things I’m afraid.
Sir Hubert Armstrong-Miller appears live at the MEN Arena on 13th June. Support act is Feargal Sharkey. Doors open at 7.30pm.
Automatic persuasive devices.
ReplyDeleteBrilliant.
Finally, a sensible explanation of how banking is supposed to work. That Robert Peston could learn a lot from you guys.
ReplyDelete